Upper Deck took Topps to court Monday and part of what was revealed could send shockwaves through the industry.
On Tuesday, lawyers for both sides submitted sealed letters hoping to sway the judge in their favor.
Will the Topps name disappear from sports card products if Upper Deck is able to buy the company? It sounds possible if you read what went on in a Delaware courtroom Monday.
Upper Deck went before a judge attempting to stop the proposed sale of Topps to Madison Dearborn Partners and Tornante Company. UD is hoping to buy enough time to sway Topps shareholders into voting down the $9.75 per share deal and instead considering Upper Deck’s $10.75 bid. A vote by shareholders is scheduled for June 28.
During court proceedings, Vice Chancellor Leo Strine Jr. of Delaware Chancery Court indicated Upper Deck has agreed to give up Topps’ Major League Baseball license in order to complete the merger, while still retaining the Topps name.
Yet much of the court battle is focused on how Upper Deck feels Topps’ Board of Directors had been giving them an illegal stiff arm. "The board has to allow the stockholders to choose an alternative if they wish to do so," said Bruce Silverstein, an attorney representing Upper Deck and its investment vehicle, Northwood Investors LLC.
The Associated Press reported the judge did not rule on Upper Deck’s request for a preliminary injunction, telling attorneys to submit supplemental letters this morning. Bruce Silverstein, Upper Deck’s attorney, confirmed to SportsCollectorsDaily.com on Tuesday that the letters had been submitted but could not comment on the contents, citing legal restrictions.
Upper Deck maintains Tornante and Madison Dearborn aided Topps directors in breaching their fiduciary duties, and that Topps has violated a confidentiality agreement by making disparaging remarks about the Upper Deck offer.
Upper Deck is seeking an injunction preventing Topps from enforcing a "standstill" provision of the confidentiality agreement that prevents Upper Deck from engaging in a tender offer.
"We’re seeking, at minimum, the right to go public and tell the world our side of the story," Silverstein said..
Topps claims that the proposed Upper Deck merger raises anti-trust issues, and that Upper Deck has refused to provide information about how it would finance the deal.
"This board, I can assure you, wants to get the highest offer for the stockholders," Topps attorney Brian O’Connnor told Strine.
O’Connor said Topps has been cautious in providing less financial information to it’s competitor, than it has given to the Michael Eisner-led group that reached a deal to purchase Topps.
"Is Uppper Deck for real, are they genuine? Or is this just a pretext to look under the tent and blow up the Eisner deal?" he asked.
AP reported Strine "appeared skeptical about Topps’ anti-trust arguments, noting that Topps acquired one of its top competitors decades ago and won a subsequent anti-trust lawsuit."
"How can they get over the giggle factor that that’s an anti-trust concern?" Strine said.
Silverstein questioned whether Topps is sincere in saying it is willing to negotiate a possible deal as long as its anti-trust and financing concerns are addressed.
"They claim to be interested in pursuing a dialogue, but what they’re interested in is running out the clock," he said.
There is no timetable for Strine to make a final decision, but it is not expected to take more than a few days at most.